Permitted Use of Commercial Premises
Permitted use – planning law and lease covenants
Commercial premises may only be used for their “permitted use”. Permitted use has two meanings – the use permitted under planning law and the use permitted by the lease.
What is the permitted planning use and how can it change?
The permitted planning use will often be specified in a planning permission – this can be checked by obtaining a copy of the planning consent from the local authority planning department.
Alternatively, a permitted use may have been established by virtue of “long user”. In general, a use will be deemed to be permitted if it has been carried on for a period of at least 10 years. This is because the local authority is not able to take enforcement action for an unauthorised change of use if the use has been ongoing for that period.
A change of use generally requires planning permission, although certain changes are permitted without planning permission – these are mentioned in the following pages.
The Town and Country Planning (Use Classes) Order 1987 (as amended) sets out the classes of use. For example, shops fall into class E(a) in England and class A1 in Wales; offices are within class E(g)(i) in England and class B1(a) in Wales. Some uses are “sui generis” which means that they do not fall into any use class and require a specific planning permission. Examples of sui generis uses include amusement arcades, betting offices, pay day loan shops, petrol stations and hostels. In England (but not Wales) they also include pubs, hot food takeaways, live music venues and cinemas.
How do leases regulate the use of commercial property?
Permitted use clauses (sometimes called user clauses) in leases often make reference to the classes of use in the Use Classes Order. A lease may define the permitted use broadly, for example, “any use within class E(a)” for a retail use in England or “any use within class A1” for a retail use in Wales. Alternatively, a lease may specify a very particular use, for example, “as a hair salon”, and require the landlord’s written consent to any other use.
If user clauses are very restrictive this may have an adverse impact for the landlord at rent review. Landlords should take advice from their surveyors when negotiating and drafting a user clause.
It is usual for leases to prohibit tenants from applying for planning permission for a change of use without the landlord’s consent. This enables the landlord to keep control and to prevent the tenant from obtaining permission for a use that might devalue the premises or detract from the amenity of the surrounding area.